Police in the tiny British territory said they had opened an investigation into the death of a Spanish national “in an incident involving an HM customs vessel carrying out anti-smuggling operations.. and another boat”.

They identified him as a 42-year-old resident of La Linea de Concepcion, a down-trodden Spanish town that borders Gibraltar on Spain's southern tip.    

Following the incident, which took place late on Monday, a Spanish policespokesman told AFP the boat in question belonged to “several suspected tobacco
smugglers”.

But the fatal collision sparked angry demonstrations in La Linea where around 100 people began “hurling different objects at the police,” the police official said, indicating the unrest continued into the night.

In a statement, Gibraltar's Chief Minister Fabian Picardo said a full investigation would be carried out and the victim's family kept fully informed.

“The exact circumstances surrounding this tragic incident are still unclear but I have sent my deepest condolences to the family involved and to the mayor of La Linea,” he said.

A sprawling town with high unemployment, La Linea is located in the southern Cadiz province which is the entry point for 40 percent of all drugs smuggled into Spain, interior ministry figures say.

It is also the entry point for contraband tobacco, with widespread cigarette smuggling between the tiny, low-tax British territory and Spain posing a major irritant in their frayed diplomatic relations.